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The Infinite Banking Concept: Why We Believe In It

My name is Pedro Palicio and I have been involved in the financial services industry since 1994. After working for two of the major financial institutions in the world, my wife and I started our own company, Universal Wealth Managers LLC, in 2005 with the purpose of offering our clients unbiased insurance brokerage and financial advisory services.

During the financial crisis of 2007-2008, we finally came to the conclusion that “conventional financial wisdom” was based on faulty premises and to properly serve our clients and protect them from the greed, corruption, and irresponsibility of Wall Street banks and financial institutions, a paradigm shift was in order.

It became our mission to find ways in which individuals could accumulate money that they could control and that was not exposed to the risks of the stock market, so none of our clients could lose again 40 to 50% of their money when they were two years away from retirement or when their child would start college the following year.

It was sometime in 2010 when we met an old colleague who gave us a copy of Nelson Nash’s “Becoming Your Own Banker”. After a couple of readings, the concept seemed to us “too good to be true”. Based on our educational background and training, we tried to poke holes into the idea, but the more we tried, the more we became convinced that that 92-page book made a lot of sense.

To make a long story short, after spending twenty years in the financial services industry, nothing has had a more profound impact in our personal and financial lives than reading the masterpiece “Becoming Your Own Banker”. It convinced us that most of our financial education and experience was not based on reality but on flawed premises and that the only way to control our financial future was to control the banking function ourselves. It has provided us, our family, and our clients with financial independence and peace of mind.

Designing Infinite Banking policies for our hundreds of clients have allowed them and us to sleep well at night knowing that their money is guaranteed to grow independently of the stock market.

As examples, we have one surgeon who was leasing his equipment at an annual rate of over 20%. He used a policy loan to purchase the equipment and by repaying the loan at a rate of 20%, substantially increased the cash value of his policy. Another client has used a policy loan to purchase income-producing real estate properties and now is using the cash generated by these properties to repay the loan and purchase additional banking policies. What these clients have realized is that while they have outstanding loans, their actual cash never left their policies, it keeps growing, and it is, in fact, doing double duty for them.